Telecommunications - Dominican R.

Number portability launched, regulator wants

Number portability launched, regulator wants "war of competition"

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Number portability (NP) has officially launched in the Dominican Republic on Wednesday (Sep 30), following a trend expected to be seen throughout other Latin American countries in 2010 and 2011.

The Dominican Republic is only the second country in the Caribbean to launch NP after Puerto Rico, and the fourth country in Latin America to have fixed and mobile NP. Brazil and Mexico launched it last year, while Panama has had fixed line NP in place for several years but does not have mobile NP.

In a statement, José Rafael Vargas, head of Dominican Republic telecoms regulator Indotel, said that the 17 telecoms companies operating in the country had worked hard to incorporate the number portability system into their networks in time for the Wednesday launch.

The process to implement NP started in 2006 as one of the requisites of the free trade agreement between the US, Central America and the Dominican Republic (Cafta-DR).

Indotel awarded a contract to manage the central database and transaction database to El Corte Inglés at the end of March. The watchdog has said users would pay 80 pesos (US$2.20) to port their numbers, which could be charged to their telephone bills in 20-peso installments.

Vargas said that users will be able to port their numbers in 24-72 hours if they are not in default with payments with their original provider.

A POSITIVE THREAT

Vargas reiterated that the benefits of number portability are seen not necessarily in the amount of people porting to other operators but in the fact that operators are obliged to up their game and focus on quality service and customer retention. That obliges them to keep investing in their networks.

"We want a war of serious, respectful and well managed competition which will be carried out based on investment and technological development. The companies understand that. What we want is that the companies that want to use the available space, use it," Vargas said.

José Magana, analyst with Pyramid Research, reiterated that view, saying that experience in other markets shows that few numbers end up being ported and the benefits lie elsewhere.

"Even though number portability may not end in a lot of numbers being ported, it moves competition to other things like efficiencies and offering good quality services, offering better handsets. We're positive that the DR's move into number portability will be important and benefit customers," Magana told BNamericas.

Ignacio Perrone, industry manager for ICT with Frost & Sullivan Latin America, agrees.

"It spurs operators to improve quality and prices to retain their customers because they always have that cloud hanging over them that the customer may leave. In reality few actually exercise the option to port but the mere fact that it exists is an incentive," Perrone told BNamericas.

The Dominican Republic's mobile market is led by Codetel, a unit of Mexican giant América Móvil (NYSE: AMX), with over 50% market share followed by Orange Dominicana, part of France Telecom (NYSE: FTE), with around 30% and two smaller players, Viva, of Trilogy International and Tricom, according to Pyramid.

The country has a mobile penetration rate of some 90% which makes it ripe to take advantage of NP, which increases in importance as markets near 100% penetration, given there is little market left for first time users. Also, operators have to compete by improving their services with new handsets, prices or promotions. Magana believes that some operators will reduce or even waive the porting fee as a means of persuading customers to join them.

Several other countries in the region are planning to introduce NP over the next few years. Ecuador is set to go live on October 12, and Peru on January 1. Chile is eying the end of 2010 for a launch and Panama says it is close to a launch.